A father carries his infant son's limp body in his arms, the boy's hair matted with blood. Behind them, the twisted remains of the man's home lie scattered in the street after a mortar attack. A piece of the building has pierced the child's skull. The boy will not survive, like his little sister, who died just minutes before.

Welcome to Swat, a valley in northwest Pakistan that has been transformed from a tourist haven to what the government leader for the area now calls a "terror camp."

Where there was once a ski resort there are now masked men who dump mutilated bodies in the town square. Where there was once the most developed district in the area, there are now the destroyed remains of more than 180 schools. Where there used to be a progressive valley, women are now threatened with death for shopping alone.

Where there used to be peace, there is now terror.

"Swat used to be called the Switzerland of the east," a resident in Swat's main city, Mingora, told an ABC News cameraman, refusing to give his name. "And now people call it the land of the terrorists."

Swat 's descent into chaos, which occurred in less than a year and a half, is nearly complete. Nearly every single local politician has moved out after a steady campaign of attacks on their homes and families, including a "hit list" of 47 of them released this weekend. No parents feel safe enough to send their children to school, and schools will stay closed until the situation improves, officials said. More than 80 percent of the police force has quit. The economy has collapsed, and business has evaporated.

The reason why Swat has fallen to the Taliban has become a bit of a blame game, with the local government blaming the military and the military blaming a botched peace deal, the people themselves, and the difficult conditions.

But there is a widespread belief in Swat that the military has not defeated the militants because the army has struck a deal with them. It is a belief that few people speak about on the record, but the Awami National Party, which is the coalition leader in the Northwest Frontier Province, agreed to a candid, on-camera interview.

Government and Military Point Fingers in Blame Game

"At times, when I see the results, the outcomes, I wonder, is this really a professional army, an intelligence force, that is wreaking havoc in the lives of the people?" asked Bushra Gohar, the party's senior vice president. "I'm not willing to accept that our military cannot catch a handful of militants and extremists… People's perceptions after several months of operations is that there is a military-militant-mullah alliance."

The military, which has lost 124 soldiers in Swat, angrily denied that, calling it "absurd and preposterous." It said when it first arrived in Swat, in Nov. 2007, it was able to clean the valley of militants in five weeks. But a spring 2008 peace deal between the ANP and the Taliban allowed the militants to return and integrate themselves into society, and the current operation is suffering because of that, the army said.

"It's a very, very slow fight. It's an operation which has a lot of constraints," said Maj. Gen. Athar Abbas, the army's chief spokesman. "You have to move through the population, and particularly if the population is not coming out in open, not willingly welcoming the army, and is not pointing out which areas the militants are either consolidating or hiding or have taken refuge, then it becomes difficult to actually target the militants."

The people who have terrorized Swat are a mostly local band of Taliban and criminals, but the valley's anarchy could spread into more districts of Pakistan, analysts said, furthering eroding government writ in northwest Pakistan, which has become increasingly dominated by the Taliban.

"Swat was the most peaceful district in the whole province. So if a peaceful place can become so violent, then the same thing can happen to the other places," said Rahimullah Yusufzai, an ABC News consultant and the Peshawar-based editor of The News International newspaper, which has tried to highlight an issue the national government has only recently spoken publicly about.

"Swat will have a fallout on the adjoining areas, and it includes some districts that are on the Afghanistan border," Yusufzai continued. "Swat has already become one of the centers of the operation for Taliban in the neighboring districts and the tribal areas."

Graduating Police Officers Refuse to Go to Swat

Late last year, 600 elite police officers graduated from a counterinsurgency program at the Punjab Regimental Center in Mardan, just outside of Peshawar.

They refused to be deployed to Swat, officials told ABC News, because they did not agree with the way the military was conducting the operation.

That underscores a widespread doubt in the army's ability as well as its motivation to defeat the militants.

The military is changing its tactics, Abbas said, moving soldiers closer to the population. An additional brigade is also arriving in Swat, and a brigade that was operating there has been removed, replaced by a new commander who was based in Gujranwala, a district in southeastern Pakistan.

Over the weekend the military took a dramatic step, issuing an "indefinite" curfew for parts of Swat, according to the state-run media center in Swat.

"Anybody and vehicle violating curfew orders will be shoot at sight. No vehicle to move in the area during curfew," the statement said. "People have been requested to remain in homes and avoid movement and fully observe curfew orders."

But right now, the people of Swat say Mingora and their beloved valley has never been worse.

"Swatis are unable to live even hand to mouth," said Ziauddin Yousafzai, a social activist and a senior member of Swat's Private Schools Management Association. "Swat is burning."

Note: A local journalist in Swat contributed reporting for this article.